How to manage and dismiss an employee with a physical injury

As a business owner, you will probably need to manage an employee with a physical illness or injury at some point. While handling these situations, you will need to navigate the employee’s legal entitlements and consider the risks of dismissing an injured employee. You should ultimately seek an outcome that: 

• is beneficial for you and the employee; and
• avoids the potential for the employee to make a legal claim.

This article explains:

• employees’ entitlements; 
• the legal risks associated with dismissing an injured employee; and 
• how to mitigate those risks.

How much sick leave is the employee entitled too?
Under the Fair Work Act 2009 (Cth) (the Act), a full-time permanent employee can take ten days of paid sick and carer’s leave for each year of service.

An employee may take paid sick or carer’s leave:

• if they are not fit for work because of sickness or an injury; or
• to provide care to a member of their immediate family or household.

For example, an employee who takes leave to provide care to their sick child will reduce their balance of leave.

Sick leave accrues progressively throughout the year. This means that your employees need to work a certain number of days to be entitled to this form of leave. 

For example, if an employee starts on 1 January, they will have accrued five days of sick leave by 1 July. 

However, sick and carer’s leave will not accrue over periods where a worker takes unpaid leave. This is except for:

• community service leave; or
• any contradictory provision in an award or agreement.

Sick leave also accumulates from year-to-year, so employees can build their balance of leave over time.

For example, if an employee starts on 1 January 2016 and takes no sick days, they will have accrued 40 days of sick leave by 1 January 2020.

Employers can be uncomfortable with employees accruing significant sick leave, as it may pose a financial risk to your business. To control against employees’ dishonest behaviour, you can require that they provide you with evidence that:

• they are sick: or
• they must provide care to a family or household member.

For example, you may request a doctor’s certificate or a statutory declaration. You can also direct the employee to seek an examination from your chosen medical practitioner.

Read more: Pilot who failed drug test loses unfair dismissal claim

Importantly, paid sick leave does not apply for any period covered by workers compensation.

Who is entitled to sick leave?
Part-time employees are entitled to sick leave in proportion to the number of hours they work in a full work week.

For example, an employee that works 24 hours per week is entitled to five days of paid sick leave for each year of service. 

Casual employees are not entitled to paid sick leave, unless they are engaged on an ongoing and systematic basis, with an ongoing expectation of work. However, the casual nature of their employment allows them to refuse to work a shift, including due to sickness.

Can I dismiss an employee for taking sick leave?

Absences of Less Than Three Months
You cannot dismiss an employee merely because they are temporarily absent from work due to an illness or injury, where the:

• employee has provided a medical certificate for the illness or injury within a reasonable timeframe; and
• employee’s absence extends for less than three months or their absences over a twelve month period total less than three months.

Absences of More Than Three Months
You may be able to dismiss an employee if they are temporarily absent from work because of illness or injury where:

• the employee’s absence extends for more than three months or their absences over a 12 month period total more than three months; and
• the employee is not on paid sick leave for the duration of this absence.

However, you may be subject to certain risks, and as such legal advice should always be sought.

What are the Risks of Dismissing an Employee for Taking Sick Leave After Three Months?

Although the law does not prohibit you from dismissing an employee for absences of more than three months, you may still be at risk of a claim under the FairWork Act’s:

• general protections provisions; or
• unfair dismissal provisions;

You may also face a claim made under other State, territory and federal anti-discrimination legislation. These claims may cause your business financial harm or damage your reputation.

1. General Protections Claim

An employee may lodge a general protections claim if you take adverse action against them because they exercised a workplace right. This type of claim is broad and intends to secure employees rights, for instance:

• protection from discrimination (for example, on the basis of a disability);
• joining a union; and
• taking sick leave.

Therefore, you cannot dismiss an employee merely because the employee took sick leave.

You also cannot take adverse action against an employee, including dismissing them because of a physical disability.

If an employee brings a general protections claim against you under the Act, you must demonstrate that you dismissed the employee solely because they were no longer able to perform the inherent requirements of the role. 

For example, a packaging and shipping employee can no longer perform their role if: 

• they are indefinitely on leave and not attending work; or
• their disability prevents them from working in a warehouse environment.

2. Unfair Dismissal Claim

Similarly, you may only dismiss an employee if you:

• have a valid reason; and
• provided procedural fairness to the employee.

Ensuring procedural fairness to the employee requires you to be equitable and unbiased, such as allowing the employee to explain themselves.

You likely cannot dismiss an employee just because of their sickness or injury. This means you will need to consider other ways they are failing to uphold their workplace duties. To ensure procedural fairness, you should also maintain communication with the employee throughout their absence. 

3. State, Territory and Federal Anti-Discrimination Legislation

You should also be aware of specific State, territory and federal anti-discrimination laws. State, territory and federal legislation prohibits an employer from discriminating against an employee. 

For example, you cannot treat an injured employee any less favourably than your other employees, unless they are unable to carry out the inherent requirements of the role. 

You must also consider reasonable adjustments that would allow the employee to meet these requirements. However, you will not be required to undertake these adjustments if they would impose an unjustifiable burden.

For example, it may be overly expensive to install wheelchair access for an injured employee. 

Key takeaways
You should ensure that you understand your employee’s leave entitlements so that you treat them fairly and avoid breaching the Act. You cannot dismiss an employee if they are absent for less than three months. Even after this three month period, you may be at risk of the employee bringing a claim for unfair dismissal or discrimination.

Nathalie is a lawyer in LegalVision’s employment team.